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UK job vacancies at record high as wages pick up

Job vacancies have hit a record high as the UK's labour market continues to "rebound robustly", according to the latest official figures. The number of vacancies hit 953,000 in the three months to July, the Office for National Statistics (ONS) said. The unemployment rate fell to 4.7% in the three months to June, while the annual growth in average pay was 7.4%. However, the ONS urged caution in reading too much into the rise in wages.  ONS deputy statistician Jonathan Athow told the BBC that while the rise in average pay "hasn't been that high for a long time", it also compares to last year when millions of people were on furlough and were not being paid their full wage. 

"This time last year we had millions of people on furlough many getting 80% of their wages, other people having their hours cut, and that pushed wages down," he said.

"So when we look at wages this year, when people have come back from furlough, it's really been boosted by the fact that last year wages were quite low. Some of this group was just wages returning to the level before the pandemic."

The ONS said payrolls rose by 182,000 between June and July, although at 28.9 million it is still 201,000 lower than before the pandemic struck. The number of people on payroll has now grown over half a million in the past three months, regaining about four-fifths of the fall seen at the start of the pandemic.

Overall, Mr Athow said the "world of work continues to rebound robustly" from the pandemic.

He said that early survey figures show that the number of job vacancies passed one million for the first time ever in July. Arts, leisure and food service firms were among those making a big contribution to the surge in job openings.

"There was no sign of redundancies starting to pick up in our survey data ahead of the furlough scheme beginning to wind down, and Insolvency Service figures for July suggest the same," Mr Athow added.

Chancellor Rishi Sunak said: "I know there could still be bumps in the road but the data is promising - there are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched." 

The furlough scheme is set to finish at the end of September.

Ruth Gregory, senior UK economist at Capital Economics, said the jobs data should calm fears that the ending of government support measures could send unemployment higher.

"The figures add weight to our view that there won't be a big shake-out in employment once the furlough scheme expires at the end of September. 

"It was encouraging that PAYE employment in July rose by 182,000 month-on-month and the claimant count fell by 7,800 month-on-month leaving the claimant count rate unchanged at 5.7%," she said.

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